Travel Insurance: Yes or No?

Travelers caught in Icelandic volcano delays may have been wishing they purchased a travel insurance policy, but hindsight is 20/20. Running out and purchasing insurance now might not make sense in your situation.

Travelers who were on their way to Europe last month may have wished they had thought to buy trip cancellation/interruption travel insurance policy, as the eruption of the Iceland volcano stranded many for days. As the ban on air travel wore on, travelers ran up unanticipated bills for lodging, meals, and other necessities of life, like Internet access. A trip cancellation/interruption policy, the most common type of travel insurance sold, probably would have covered many of those costs.

Thanks a lot, Eyjafjallajokull

Like many insurance policies, however, travel insurance can vary widely as to what it does and doesn’t cover, so it pays to read the fine print before you buy. In general, most policies will cover the cost of nonrefundable prepaid travel expenses if you cancel a trip because of illness, injury, or a death in the family. In addition, the policy might also pay for expenses linked to travel delays, like the ones caused by the Iceland volcano.

Here’s where the policy’s terms can get sticky. On many policies, travel delay coverage doesn’t start until you’ve been delayed for a minimum length of time, which can range from six to 24 hours. The policy may also have a pier diem limit on coverage along with an overall maximum. The policy may limit coverage to specific perils, so you should carefully check any exclusions before you buy.

Tiger attack? I'm sorry, ma'am, but we just don't cover that type of delay

Many of those stranded by the Iceland volcano eruption were on short trips, which, according to travel consultants, generally aren’t worth the extra expense of travel insurance. But for those who are paying up front for a cruise or for a trip with an extensive itinerary, the protection can be well worth the cost. For more information on travel insurance and to comparison shop for a policy, go to InsureMyTrip.com.